On December 15, 2022, FERC issued a Notice of Proposed Rulemaking (“NOPR”) seeking to revise its regulations governing applications for permits to site electric transmission facilities under § 216 of the Federal Power Act (“FPA”). Specifically, the NOPR seeks to: (1) revise Section 50.6 of FERC’s regulations to reflect the Infrastructure Investment and Jobs Act’s (“IIJA”) amendments to the FPA § 216; (2) eliminate the required one-year delay before the commencement of FERC’s pre-filing process; (3) supplement the existing landowner and stakeholder participation provisions in Part 50 of its regulations; and (4) revise the timing of the required Project Participation Plan (“Plan”) in the pre-filing application process.

Continue Reading FERC Issues Proposed Rule Implementing FPA Amendments in Infrastructure Investment and Jobs Act

On November 29, 2022, FERC conditionally accepted PJM Interconnection, L.L.C.’s (“PJM”) tariff revisions to transition from a serial first-come, first-served generator interconnection queue process to a first-ready, first-served clustered cycle approach. FERC found that the revisions will help reduce interconnection queue backlogs and delays.

Continue Reading FERC Conditionally Accepts PJM Interconnection Reforms for a First-Ready, First-Served Clustered Cycle Approach

On November 17, 2022, FERC issued three orders intended to address the reliability impacts of the rapid integration of inverter-based resources (“IBRs”), including solar, wind, fuel cell, and battery storage resources, on the Bulk-Power System (“BPS”). Specifically, in the first proceeding, FERC directed the North American Electric Reliability Corporation (“NERC”) to develop a plan to register the entities that own and operate IBRs so that NERC may monitor their compliance with NERC’s Reliability Standards. In the second proceeding, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to direct NERC to develop new or modified Reliability Standards that address reliability gaps related to IBRs. Lastly, in the final proceeding, FERC approved revisions to two of NERC’s Reliability Standards.

Continue Reading FERC Issues Proposals Regarding Inverter-Based Resources to Improve Grid Reliability

On October 28, 2022, FERC conditionally accepted Southwest Power Pool, Inc.’s (“SPP”) region-wide transmission cost allocation proposal. The revisions alter Attachment J of SPP’s Open Access Transmission Tariff (“Tariff”) and establish a waiver process through which, on a case-by-case basis, entities may request the costs of a specific transmission facility with a voltage level between 100 kV and 300 kV (“Byway Facility”) to be fully allocated to the SPP region on a postage-stamp basis—i.e., pursuant to a uniform regional rate. Commissioners James Danly and Mark Christie each dissented, respectively arguing that the revisions provide SPP too much discretion to allocate Byway Facilities on a regionwide basis and that the record did not show strong consensus among SPP states for the change in cost allocation.

Continue Reading FERC Accepts SPP Region-Wide Transmission Cost Allocation Proposal

On October 20, 2022, FERC issued orders in two separate proceedings that clarified how investor company appointments to public utility boards of directors can trigger additional FERC regulatory scrutiny. Specifically, in the first proceeding, FERC determined that such appointments established an “affiliate” relationship under FERC’s rules, while in the second proceeding, FERC determined that the appointments effectuated a “change in control” over the public utility that required prior FERC approval under Section 203 of the Federal Power Act (“FPA”).

Continue Reading FERC Elaborates on How Board Membership Impacts “Affiliation” Determination Under FERC’s Rules

Introduction

On September 22, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued a Notice of Proposed Rulemaking to establish rules providing incentive-based rate treatment for utilities making certain voluntary cybersecurity investments (“Cybersecurity NOPR” or “NOPR”).[1] According to FERC, the Cybersecurity NOPR seeks to benefit consumers and national security by encouraging investments in advanced cybersecurity technology and participation by utilities in cybersecurity threat information sharing programs, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“Infrastructure and Jobs Act” or “Act”).[2] While the Cybersecurity NOPR supersedes FERC’s December 2020 cybersecurity NOPR (whose docket is being terminated), the instant Cybersecurity NOPR generally retains the incentive provisions outlined in the December 2020 NOPR. Under the Cybersecurity NOPR, FERC proposes that:

Continue Reading FERC Proposes to Offer Rate Incentives for Voluntary Cybersecurity Investment

On August 30, 2022, the U.S. Court of Appeals for the Fifth Circuit issued an order in NextEra Energy Capital Holdings, Inc. v. Lake, a case raising dormant Commerce Clause challenges to a 2019 Texas law that bans new entrants from building transmission lines that are part of a multistate electricity grid.  The majority reversed the lower court’s Rule 12(b)(6) dismissal of NextEra’s petition, thereby allowing the case to proceed to trial in district court.
Continue Reading 5th Circuit Holds that Texas Law Permitting Blocking of Competitive Transmission Owners from Building New Lines Violates the Commerce Clause

On July 15, 2022, a FERC Administrative Law Judge (“Presiding Judge”) issued an initial decision in a proceeding involving the “threshold” issue of whether four solar generating facilities (collectively, “Facilities”) interconnected at the distribution level are eligible to receive reactive power compensation under Schedule 2 of the PJM Interconnection, L.L.C. (“PJM”) Open Access Transmission Tariff (“Tariff”). The Presiding Judge concluded that the Facilities are ineligible to receive reactive power rates because the facilities in question did not satisfy the so-called capability requirement, as explained further below.
Continue Reading FERC Judge Rules that Four Solar Generators Interconnected at the Distribution Level Are Ineligible to Receive Reactive Power Compensation Under PJM’s Tariff

On July 8, 2022, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued its decision in City of Oberlin, Ohio v. FERC, a proceeding involving the issue of whether FERC properly granted NEXUS Gas Transmission, LLC (“Nexus”) a certificate of public convenience and necessity to construct and operate a natural gas pipeline that will facilitate exports into Canadian markets (“Project”).  The Court upheld the certificate.
Continue Reading D.C. Circuit Allows Natural Gas Pipeline Certificate to Stand, Accepting Export Precedent Agreements as Probative of Need

On June 16, 2022, FERC issued two Notice of Proposed Rulemakings (“NOPRs”) aimed at improving the reliability of the bulk power system against threats of extreme weather. The NOPRs build on the June 2021 Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability, which revealed an industry-wide need to assess current vulnerabilities of the transmission system to weather-related risks.
Continue Reading FERC Proposes Rules to Address Extreme Weather